COSTS, COSTS LAWYERS, RESERVED AND UNRESERVED ACTIVITIES: PAYING PARTIES’ ARGUMENTS LARGELY UNSUCCESSFUL
In Allen v Brethertons LLP  EWHC B3 (Costs) Master Leonard determined that the work done by a cost lawyer, and the team working with her, were recoverable costs. I am grateful to Mark Carlisle for drawing my attention to this case. An article on the case by the firm that acted for the claimant can be found here. It is clear from this article that the claimant recovered costs of £6,410.80.
The Master was determining costs in an application for delivery of a final statute bill. The person with effective conduct of the action on the claimant’s behalf was a Costs-Lawyer employed by Checkmylegalfees.com. The costs-lawyer was assisted by others in her team. The defendant solicitors took the point that the work being done could not be delegated and the work done by team members could not be recovered.
The Master summarised the issues
3. Briefly, the point is this. As will be evident from my judgment on the substantive issues dated 2 October 2018, the person with effective conduct of the Claimant’s application has been Ms Kerry-Anne Moore, a Costs Lawyer employed by Checkmylegalfees.com. The Defendant refers me to guidance published by the Costs Lawyer Standards Board (“CLSB”) as to the conduct by Costs Lawyers of “reserved legal activities” (as defined by the Legal Services Act 2007).
4. That guidance emphasises that the CLSB authorises and regulates individual costs lawyers, not authorised entities or licensed alternative business structures: and in consequence, that a Costs Lawyer cannot delegate reserved legal activities such as the exercise of a right of audience or the conduct of litigation.
5. In this particular case, Ms Moore (although she has quite evidently undertaken the bulk of the work) has, according to the Claimant’s N260 costs schedule, been assisted by Mark Carlisle and Leanne O’Gorman, both described in the schedule as costs draftsmen rather than Costs Lawyers, and by Jamie Bedford, a litigation executive without professional qualifications.
6. It is not in dispute that Ms Moore is, for the purposes of these proceedings, an authorised person with the right, under the provisions of the 2007 Act, to conduct litigation and to exercise a right of audience. The Defendant says however that as she is unable to delegate either a right of audience or the conduct of litigation to others, the Claimant cannot recover the cost of any of her colleagues’ work.
THE MASTER’S CONCLUSION:
22. Ms Bedford makes the following submissions, with all of which I agree. First, the Defendant’s submissions on “delegation” miss the point. The Claimant’s case is that the work undertaken by Ms Moore’s team for the most part did not constitute reserved activity, and in so far as it did, the relevant persons undertook it as exempt persons, as defined by the 2007 Act.
23. The 2007 Act, as Ms Bedford says, creates a narrow class of reserved legal activities. If work falling within that narrow class is carried out by an authorised person or an exempt person, such work is undertaken lawfully. If work falls to be considered merely a “legal activity” as opposed to a reserved legal activity, then it is undertaken lawfully, whoever undertakes it.
24. It follows that the appropriate questions for me are whether the tasks undertaken by Mr Carlisle, Ms O’Gorman and Mr Bedford were reserved legal activities, or merely legal activities; if they were reserved legal activities, whether the person undertaking them was an authorised person; and if not, whether that person was an exempt person.
25. Ms O’Gorman’s only role in this litigation has been to prepare a bill of costs. Ms Bedford submits that the preparation of that document amounts to the preparation of a reserved instrument, and therefore is a reserved activity; it was however undertaken under the supervision and instruction of Ms Moore, thus making Ms O’Gorman an exempt person, and the cost of her work recoverable.
26. Assuming that a bill of costs is a reserved instrument, I agree with Ms Bedford. Ms Moore has been overseeing this matter, including the task of preparing the N260. Ms Bedford confirms that (contrary to the impression given by the N260 itself, corrected in submissions) Ms Moore checked and signed it once it was complete.
27. The point is however academic. As Mr Robbins for the Defendant points out, I did not order detailed assessment. Work on a bill of costs was premature and has been disallowed.
28. Mr Bedford performed a fairly typical grade D supporting role, preparing indices, bundles, etc. None of that (bearing in mind the guidance of the Court of Appeal) constitutes a reserved activity. I have however disallowed most of his time: excluding a little correspondence and telephone time, it seems to me to be largely administrative in nature.
29. Mr Carlisle has played a limited role in these proceedings. He appears to have played a broad advisory role from the early stages, offering some support services, and he has also engaged in correspondence. Again, in my view, none of this constitutes reserved activity but again, I have disallowed much of such time as duplicative.
30. Mr Carlisle also prepared for the short costs hearing before me on 15 January, and addressed me on behalf of the Claimant. He has appeared before me a number of times. I am well aware of his qualifications and his experience. The issue of his right to appear as an advocate on costs hearings has come up before. His case is probably on all fours with Kynaston v Carroll but it is in any event my practice, for the avoidance of doubt, to grant him a right of audience. That was the basis upon which I heard him on 15 January. He was, for the purposes of that hearing, an exempt person, and his costs of preparation for and attending that hearing are, insofar as reasonable and proportionate, recoverable.